EDUNIQUE TUTORIALS

WORKSHEET: ADMISSION OF PARTNER-2

Q 1 Accumulated profits are transferred to capital account in ______ratio.
A Old profit sharing ratio
B New profit sharing ratio
C Sacrifice ratio
D Gain ratio

Q2 On the admission of a new partner, the decrease in the value of assets is debited to:

A Asset Account
B Profit & Loss Adjustment Account
C Old Partner's Capital Account
D None of the above

Q 3 A and B are in partnership sharing profits in the ratio of 3: 2. They take C as a new partner. Goodwill of the firm is
valued at ₹ 3,00,000 and C brings ₹ 30,000 as his share of goodwill in cash which is entirely credited to the Capital
Account of A. New profit sharing ratio will be:
A 3: 2: 1
B 6: 3: 1
C 5: 4: 1
D 4: 5: 1

Q 4 Choose the correct alternative-

At the time of admission of a partner, undistributed profits appearing in the balance sheet of the old firm is
transferred to the capital account of:
A Old partners in old profit sharing ratio.
B Old partners in new profit sharing ratio.
C All the partner in the new profit sharing ratio.
D None of the above.

Q 5 Navya and Radhey were partners sharing profits and losses in the ratio of 3: 1. Shreya was admitted for 1/5th
share in the profits. Shreya was unable to bring her share of goodwill premium in cash. The journal entry recorded
for goodwill premium is given below:

The new profit-sharing ratio of Navya, Radhey and Shreya will be:
A 41: 7: 12
B 13: 12: 10
C 3: 1: 1
D 5: 3: 2

Q 6 General Reserve at the time of admission of a partner is transferred to ____________.

A Revaluation Account
B Old Partner's Capital Account
C Capital Accounts of all partners, including new partner

FOR ADMISSIONS CONTACT

Prof. Harsh Shah (Accounts, Economics, Commerce) 9022039186
Prof. Darshit Shah (Math) 8080044710
 EDUNIQUE TUTORIALS
D None of the above

Q 7 X and Y were partners sharing profits in the ratio of 1 : 2. Their Balance Sheet as at 31st March, 2018 was as
follows:

They agreed to admit Z for 1/5th share from 1st April, 2018 on the following terms:

1. Goodwill of the firm was valued at ₹ 60,000 and Z to bring in his share of premium for goodwill in cash.
2. Provision for bad debts be raised by ₹ 1,500.
3. Patents are valueless.
4. Stock to be reduced by 10%.
5. Outstanding expenses be increased by ₹ 6,000.
6. ₹ 2,500 be provided for an unforeseen liability.
7. Z to bring in Capital equal to 15th15th of the combined capital of X and Y.

Q 8 A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1.

On the above date D was admitted as a new partner and it was decided that:

1. The new profit sharing ratio between A, B, C and D will be 2 : 2 : 2 : 1.

2. Goodwill of the firm was valued at ₹ 90,000 and D brought his share of goodwill premiurn in cash
3. The market value of investments was ₹ 24,000.
4. Machinery will be reduced to ₹ 29,000.
5. A creditor of ₹ 3,000 was not likely to claim the amount and hence to be written-off.
6. D will bring proportionate capital so as to give him 16th16th share in the profits of the firm.

Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.

FOR ADMISSIONS CONTACT

Prof. Harsh Shah (Accounts, Economics, Commerce) 9022039186
Prof. Darshit Shah (Math) 8080044710
 EDUNIQUE TUTORIALS
Q 9 On 31st March, 2016 the Balance Sheet of A and B, who are partners in a firm sharing profits in the ratio of 3 : 2
was as follows:

On 1st April, 2016 they agreed to admit C into partnership for 15th15th share of profits on the following terms:

1. Provision for doubtful debts would be increased by ₹ 20,000.

2. The value of land and building would be increased to ₹ 1,80,000.
3. The value of stock would be increased by ₹ 40,000.
4. The liability against workmen's compensation reserve is determined at ₹ 20,000.
5. C brought in as his share of goodwill ₹ 1,00,000 in cash.
6. C would bring further cash as would make his capital equal to 20% of the total capital of the new firm, after
the above revaluation and adjustments are carried out.

Prepare Revaluation Account, Partner's Capital Accounts and Balance Sheet of the firm after C's admission.

Q 10 Pappu and Dhanraj were partners in a firm sharing profits in the ratio of 3 : 1. Their Balance Sheet as at 31-3-
2016 was as follows:

They admitted Leander as a new partner on 1st April, 2016. New profit sharing ratio is agreed as 3 : 2 : 3. Leander
brings in proportionate capital after the following adjustments:

1. Leander brings ₹ 16,000 as his share of goodwill.

2. Provision for doubtful debts is to be reduced by ₹ 2,000.
3. There is an old typewriter valued at ₹ 2,400. It does not appear in the books of the firm, it is now to be
recorded.
4. Patents are valueless.

Prepare Revaluation Account, Capital Accounts and the Opening Balance Sheet of Pappu, Dhanraj and Leander.
FOR ADMISSIONS CONTACT
Prof. Harsh Shah (Accounts, Economics, Commerce) 9022039186
Prof. Darshit Shah (Math) 8080044710
 EDUNIQUE TUTORIALS
Q 11 Nem and Khem sharing profits in the ratio of 3 : 2 admit Prem as a partner with 1313 share in profits. He had to
contribute proportionate capital. They had following financial position:

They agreed to admit Prem as a partner on the following terms:

1. Plant and Machinery to be reduced by 10%.

2. Stock to be increased by ₹ 3,000.
3. Bad debts provision was to be created at 5%.
4. Accrued incomes not appearing in the books ₹ 900.
5. Prem was to introduce ₹ 20,000 as premium forgoodwill for 13rd13rd share of the future profits of the firm.

Prepare Profit and Loss Adjustment Account, Capital Accounts and Balance Sheet of the new firm. Also calculate new
profit sharing ratio.

Q12 P and Q are partners sharing profits in 3 : 1. R is admitted and the partners decide to share the future profits in
the ratio of 2 : 1 : 1. The Balance sheet of P and Q as at 31st March, 2018 was as under:

It was decided that:

1. Part of the stock which has been included at a cost of ₹ 8,000 had been badly damaged in storage and could
realise only ₹ 2,000.
2. A bill for ₹ 7,000 for electric charges has been omitted to be recorded.
3. Plant & Machinery was found overvalued by ₹ 20,000. Premises be appreciated to ₹ 3,00,000.
4. Prepaid expenses be brought down to 40%.
5. R's share of goodwill is valued at ₹ 20,000 but he is unable to bring it in cash.
6. R brings in capital proportionate to his share of profit in the firm.

Prepare Revaluation A/c, Capital A/cs and the opening Balance Sheet.

FOR ADMISSIONS CONTACT

Prof. Harsh Shah (Accounts, Economics, Commerce) 9022039186
Prof. Darshit Shah (Math) 8080044710
 EDUNIQUE TUTORIALS
Q 13 A and B are partners sharing profits in the ratio of 7 : 3. C was admitted. A surrendered 1/7th of his share and B
surrendered 1/3rd of his share in favour of C. Calculate the sacrificing ratio and the new profit-sharing ratios of the
partners.

Q 14 X and Y are partners sharing profits in the ratio of 4 : 3. Z joins partnership for 27th27th share in the profits (of
which he acquires 3/4th from X and 1/4th = from Y). Z brings in ₹ 3,00,000 for his capital and ₹ 1,20,000 for goodwill.
Half of the amount of goodwill is withdrawn by the old partners.

Q 15 A and B share profits in the ratio of 3 : 2. They agreed to admit C on the condition that A will
sacrifice 320th320th of his share of profit in favour of C and B will sacrifice 120th120th of his profits in favour of C.
Calculate new profit sharing ratio.

Q 16 A and B are partners, sharing profit and losses in the ratio of 3 : 2. Goodwill appears in their Balance Sheet at
₹ 24,000, when C is admitted into partnership for 1/5th share in profit. He pays ₹ 50,000 for capital and ₹ 8,000
as goodwill. The ratio of the partners A, B and C in the new firm would be 2 : 2 : 1.
Pass journal entries in the books of the new firm to record above adjustments.

Q 17 Sania and Vrinda are partners sharing profits in the ratio of 3 : 2. They wanted to encourage cultural activities in
the area and therefore admit Urwashi a music director into the firm for 3/7th profits (which she takes 2/7th from
Sania and 1/7th from Vrinda) and brings ₹ 6,00,000 as premium out of her share of ₹ 7,20,000. Goodwill account
does not appear in the books of the firm.
You are required Pass journal entry.

Q18 A and B were partners in a firm sharing profits in the ratio of 7 : 3. On 1-3-2016, they admitted C as a new
partner for 1/6th share in the profits of the firm. They fixed the new profit sharing ratio as 3 : 2 : 1. The P & L A/c on
the date of admission showed a balance of ₹ 20,000 (Cr.). The firm also had a reserve of ₹ 1,50,000. C is to bring ₹
40,000 as premium for his share of goodwill.

Q19 Sania and Vrinda are partners sharing profits in the ratio of 3 : 2. They wanted to encourage cultural activities in
the area and therefore admit Urwashi a music director into the firm for 3/7th profits (which she takes 2/7th from
Sania and 1/7th from Vrinda) and brings ₹ 6,00,000 as premium out of her share of ₹ 7,20,000. Goodwill account
does not appear in the books of the firm.

You are required:

1. Pass journal entry.

2. Identify the values involved in admitting Urwashi.

Q 20 A and B partners sharing profits in the ratio of 2 : 1. They admit C for 1/4th share in profits, C brings ₹ 30,000 for
his capital and ₹ 8,000 out of his share of ₹ 10,000 for goodwill. Before admission goodwill appeared in books at ₹
18,000. Give Journal entries to give effect to above arrangement.

FOR ADMISSIONS CONTACT

Prof. Harsh Shah (Accounts, Economics, Commerce) 9022039186
Prof. Darshit Shah (Math) 8080044710
 EDUNIQUE TUTORIALS
Q 21 A and B are partners sharing profits and losses in the ratio of 3 : 2. On April 1st, 2018, their Balance Sheet was
as follows:

On this date they agree to admit C on the following terms:

1. C will be entitled to 310310 share in the profits which he acquires 1515 from A and 110110 from B. He will
bring in ₹ 60,000 as his capital.
2. Goodwill of the firm was valued at ₹ 40,000.
3. Plant is valued at ₹ 60,000 and Stock at ₹ 70,000.
4. Claim on account of Workmen's Compensation is ₹ 6,000.
5. Patents should be written off.
6. Investments of ₹ 5,000 which did not appear in the books should be duly recorded.
7. B is to withdraw ₹ 20,000 in cash.

Give journal entries and the Balance Sheet of the new firm.

Q 22 A and B are partners sharing profits in the proportion of 3 : 2. Their Balance sheet as at 31st March, 2018 was
as follows:

They agree to admit C as a new partner on the following terms:

1. C will be given 29th29th share of profit and he will bring ₹ 50,000 for his share of capital and goodwill.
2. Goodwill of the firm will be calculated at 2 1/2 year's purchase of the average super profits of last four years.
Profits of the last four years are ₹ 40,000, ₹ 40,000, ₹ 55,000 and ₹ 65,000 respectively. Normal profits that
can be earned with the capital employed are ₹ 14,000.
3. Half the amount of goodwill is withdrawn by old partners.
4. 15% of the general reserve is to remain as a provision against doubtful debts.
5. Outstanding salaries be increased to ₹ 16,000 Stock is overvalued by 25% and Building is undervalued by
25%. Trade Marks be written off by 50%.
FOR ADMISSIONS CONTACT
Prof. Harsh Shah (Accounts, Economics, Commerce) 9022039186
Prof. Darshit Shah (Math) 8080044710
 EDUNIQUE TUTORIALS
6. New profit sharing ratio of partners will be 4 : 3 : 2 and the capital accounts of A and B will be adjusted on
the basis of C's capital by bringing withdrawing cash as the case may be.
7. Partners decide to use 5% of the profits every year for providing clean drinking water in a nearby locality
inhabited by weaker sections of the society.

 Prepare necessary accounts and the opening balance sheet of the firm.
 Also identify the values involved in the question.

Q 23 A and B are partners sharing profits in the ratio of 2 : 3. Their balance sheet as at 31st March, 2018 was as
follows:

On 1st April, 2018 they admitted C for 1515 share in profits which he acquires wholly from B. The other terms of
agreement were:

1. Goodwill of the firm was to be valued at two year's purchase of the average of the last 3 year's profits. The
profit for the last 3 years were ₹ 58,000; ₹ 66,000 and ₹ 56,000 respectively.
2. Provision for Doubtful debts was found in excess by ₹ 2,000.
3. Buildings were found undervalued by ₹ 20,000 and furniture overvalued by ₹ 5,000.
4. ₹ 5,000 for damages claimed by a customer had been disputed by the firm. It was agreed at ₹ 2,000 by a
compromise between the customer and the firm.
5. C was to bring in ₹ 60,000 as his capital and the necessary amount for his share of goodwill.
6. Capitals of A and B were to be adjusted in the new profit sharing ratio by opening necessary current
accounts.

Prepare journal entries, capital accounts and the opening balance sheet.

-------- All the Best --------

FOR ADMISSIONS CONTACT

Prof. Harsh Shah (Accounts, Economics, Commerce) 9022039186
Prof. Darshit Shah (Math) 8080044710
EDUNIQUE TUTORIALS

FOR ADMISSIONS CONTACT

Prof. Harsh Shah (Accounts, Economics, Commerce) 9022039186
Prof. Darshit Shah (Math) 8080044710